New listings, pending sales, and average days on market all increased month-over-month. Active listings and closed sales both decreased month-over-month as the majority of sales closed in January went under contract in December and many new buyers entered the market in January.

January’s vital statistics for all homes – detached single family (DSF) and attached single family (ASF) combined – included:

•   The average price for homes was up 0.63% compared to the previous month and up 5.43% from January 2023.
•   The average days in the MLS increased 6.52% from the prior month and are up 6.52% from a year ago. The median days in MLS increased from 30 days to 36 days month-over-month.
•   Active listings at months-end were down 2.01% from December and up 18.23% from this time last year.

As we enter the new year, buyers are eagerly returning to the real estate market, encouraged by increased choices in listings. New listings have surged by 14.73 percent year-over-year, particularly in detached properties, which saw a notable increase of 17.94 percent. Pending home sales also rose by 6.5 percent, indicating growing buyer interest. However, closed sales lagged slightly, likely reflecting transactions initiated in December. Median close prices for single-family homes have risen to $625,000, with properties selling closer to list price, suggesting a more competitive market. Conversely, attached properties are experiencing a slight slowdown, with pending sales decreasing by 6.61 percent year-over-year and median close prices remaining stable at $395,000.

Looking ahead, the real estate market is poised for a strong spring selling season, driven by pent-up demand and favorable lending conditions. Despite the Federal Reserve’s decision to maintain interest rates, a decline in rates later in the year would likely further stimulate activity. However, buyers waiting for lower rates risk facing increased competition and higher prices in the future. Therefore, it’s crucial to understand the market dynamics and make informed decisions regarding timing and risk. As always, If you have any questions or need guidance, feel free to reach out.

This update is based on information provided by the Denver Metro Association of Realtors® for the period of January 1, 2024, through January 31st, 2024, for the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.

Bottom Line

If you’ve owned your house for at least a couple of years, there’s something you’re going to want to know more about – and that’s home equity. If you’re not familiar with that term, Freddie Mac defines it like this:

“. . . your home’s equity is the difference between how much your home is worth and how much you owe on your mortgage.”

That means your equity grows as you pay down your home loan over time and as home values climb. While it’s true home prices dipped slightly last year, they rebounded and have been climbing in many areas since then. Here’s why that price growth is good news for you.

In the latest Equity Insights Report, Selma Hepp, Chief Economist at CoreLogic, explains:

“With price gains continuing to help homeowners build wealth, equity has reached a new high and regained losses that resulted from declines last year. And while the average U.S. homeowner gained over $20,000 in additional equity compared with the third quarter of 2022, some markets are seeing larger increases as price growth catches up.”

And that figure is just for the last year. To help you really understand how that number can add up over time, the report also says the average homeowner with a mortgage has more than $300,000 in equity. That much equity can have a big impact.

Here are a few examples of how you can put your home equity to work for you.

1. Buy a Home That Fits Your Needs

If your current space no longer meets your needs, it might be time to think about moving to a bigger home. And if you’ve got too much space, downsizing to a smaller one could be just right. Either way, you can put your equity toward a down payment on something that fits your changing lifestyle.

2. Reinvest in Your Current Home

And, if you’re not ready to move just yet, you can use the equity you have to improve your current home. But it’s important to consider the long-term benefits certain upgrades can bring to your home’s value. A real estate agent is a great resource on which projects to prioritize to get the greatest return on your investment when you sell later on.

3. Pursue Personal Ambitions

Home equity can also serve as a catalyst for realizing your life-long dreams. That could mean investing in a new business venture, retirement, or funding an education. While you shouldn’t use your equity for unnecessary spending, using it responsibly for something meaningful and impactful can really make a difference in your life.

4. Understand Your Options to Avoid Foreclosure

While the number of foreclosure filings remains below the norm, there are still some homeowners who go into foreclosure each year. If you’re in a tough spot financially, having a clear understanding of your options can help. Equity can act as a cushion if you’re not able to make your mortgage payments on time.

Bottom Line

If you want to know how much equity you have in your home, let’s connect. That way you have someone who can do a professional equity assessment report on how much you’ve built up over time. Then let’s talk through how you can use it to help you reach your goals.

Active inventory, new listings and Pending sales all decreased month-over-month. Average days on market increased significantly month-over-month, and closed sales decreased showing that the market continued to slow throughout December.

December’s vital statistics for all homes – detached single family (DSF) and attached single family (ASF) combined – included:

•   The average price for homes was down 0.51% compared to the previous month and up 3.32% from December 2022.
•   The average days in the MLS increased 21.05% from the prior month and are up 6.98% from a year ago. The median days in MLS increased from 22 days to 29 days month-over-month.
•   Active listings at months-end were down 25.63% from November and up 4.50% from this time last year.

Reflecting on the past year in the Denver real estate market, challenges were faced, including a shortage of inventory and rising interest rates. Despite these obstacles, buyers and sellers managed to find common ground in a stabilizing market, bidding farewell to frenzied multiple-offer scenarios for sellers and allowing buyers more negotiation room. With mortgage rates on a decline, anticipation and curiosity surround the upcoming year in the Denver real estate landscape.

The expectation is that a continued decline in interest rates will lure more buyers into the market, addressing significant pent-up demand from the past two years. This surge in demand could potentially apply pressure on home prices, although it is unlikely to reach the levels seen in previous years. If demand rises, a subsequent increase in inventory is anticipated throughout the year, as sellers feel more at ease with improved financing options. Denver does not always follow national trends and predictions, often outperforming the rest of the country. Ultimately the trajectory of the year is dependent upon interest rates and consumer confidence. 

This update is based on information provided by the Denver Metro Association of Realtors® for the period of December 1, 2023, through December 31, 2023, for the following counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.